[steve46]

Sure go ahead and use 16:15

I happen to use the CME close at 16:20 for my own work...

16:15 will work just fine....

Good luck

Steve

Originally Posted by steve46 »

Sure go ahead and use 16:15

I happen to use the CME close at 16:20 for my own work...

16:15 will work just fine....

Good luck

Steve

Since this isn't ET, I won't belabor the issue, but....where and when did CME start closing at 16:20? Maybe a cite would help us all get on the same page here.

Thanks,
-fs

[steve46]

The CME settlement is an accounting process that happens after the close at 16:15. Simply put it take a few moments for all trades to be counted (this is my understanding). I have no idea "when" the CME decided to do this. You may want to inquire if it is important to you....I use the CME settlement (not the close at 16:15) in my calculations so I wait until 16:20....and if you have Esignal you can take that data point off the 16:20 bar or candle, or you can go to the CME site and get it from the Settlement data for index futures. Here is a link to the CME settlement

http://www.cme.com/html.wrap/wrapped...es/es.html?h=1

[steve46]

Ah it seems I missed your point. Your comment was about "who is right"

I see

Yes the "close" of trading is at 16:15

The CME settlement which I mistakenly labeled the "CME close" usually posts at 16:20

I have made that mistake when talking informally to traders for years.

You are right....

[steve46]

Okay so lets get back on the track here....The next item that should be important to struggling traders is detecting trend on the larger time frame. I have attached a chart using 570 minute candles. I like this because it shows longer term trend nicely and one of the candles always corresponds to the market open. As you can see from a quick scan of the chart, since mid-July we saw a very nice up trend, and if you had some experience with this kind of chart and the use of trend lines, it is possible that you could have taken some early entries, and just held to EOD for an average of 28 pts.

Notice also the transition from up to downtrending movement, and notice particularly the last significant move down. The wide range bar (taking out the trend line at 1258.75) moving down to a low of 1226. One can see the origin of tha move beginning on 9/02, where price tried to take out the upper trend line, tested that area and failed. Traders came in at that point (1297) and sold that market down significantly and if you had a longer term chart to refer to, you might have taken part of that move to the bank.

[steve46]

Easy to take for granted the simple skills like drawing a trend line

I will use the previous chart (which by the way was badly annotated, my bad) and do it correctly this time.

In general you want to connect three points with your trend lines. This is the classical method. I don't adhere to that however. I will start with any two points and look for price to confirm my trend lines with a third touch.

Further, I like to draw one set with what I call an "origin" or base point (seen on the top of this chart, and for the secondary line I like to start it somewhere BETWEEN the upper touch points.

While it may not seem important, it is a detail that new or struggling traders should pay attention to because it can impact how you enter and/or exit your trades

[steve46]

Regarding the use of the longer term 570 minute bar or candle chart, you can see the touch of the upper trend line in the overnight market (sometime after 00:00:00 EST) This suggests that price might want to correct back down. Its just a data point and one would want to develop some more evidence for a possible short before entering of course.

That pre-market test occurred at 1282 and the US market opened at 1276.50. A swing trader might have been willing to take that trade using a stop just above 82, perhaps trading around an options position. I would not be doing that, and I am pretty sure a newbie or struggling trader could not afford that risk. The return however could be anticipated from previous recent volatility (one way of estimating profit targets is to measure previous wide range "down" bars or candles).

[steve46]

Today was a fairly easy to anticipate trend day down, as institutions and funds took this opportunity to sell inventory to retail.

Newbies and struggling traders who want to survive, have no option but to observe during these times. I think the way to handle it is to simply follow whatever rule set you have established and be cautious. Market psychology rules the market. That is to say, media creates the illusion of an opportunity to buy (releasing the news of a "bail out" after close of market). The market shows a "gap up" suggesting that (retail) demand exists, and institutions are only too glad to cooperate by selling marked up inventory to naive retail buyers.

The next day (today) institutions sell it down as the public continued to buy early in the morning. Then as the bids trailed off, size players marked it down and were able to sell at a profit all the way back to the previous low (where many of them bought it to begin with). and so it goes back and forth.....

Once you learn to see the cyclic nature of this activity, it is easier to be patient and wait for the periodic opportunities that show themselves in this and every market in the world. This also illustrates the importance of risk management and learning to minimize loss so that when an opportunity arises, you have sufficient capital to participate.

Two charts this time. the first is a 5 min chart of the Globex market showing the early action and test of the previous days market.

Then another 570 minute chart with Monthly, Weekly and Daily pivot, as well as support lines in place. Note the confluence of the trend line and Monthly Pivot.

By the way, there is a good reason why the test of the trend line occurs during the night...can anyone guess why that is usually the way it happens?